02 / 02 / 2014

Company Establishment and Corporate Taxation in Turkey

The types of business organisations most commonly used for establishment of foreign presence in Turkey are Joint Stock Company (“JSC”) and Limited Liability Company (“LLC”) . The information given in this Bulletin consists of a comparison of JSC and LLC, and finally, general information on company establishment procedure.

I. General Information regarding the foreign investments

Foreign capital is brought into Turkey freely under the Foreign Direct Investments Law (the “Act”) , unless the provisions of international agreements and other laws related with such investments foresee any restrictions with this respect. According to the Act, any foreign investor intending an establishment of a company inTurkeyis not differ from a Turkish citizen or a legal entity, at least, in the measures of the required capital contribution. The capital contribution of the foreign investors is subject to the Turkish Commercial Code (“TCC”) as the Turkish Investors.

According to the new Commercial Code, the minimum capital for the establishment of a JSC created by contract is 50.000 (approximately € 17.000). It is 100.000 TL for a JSC whose shares are not publicly traded but which has adopted the registered capital system. The minimum capital for an LLC is 10.000 TL (approximately € 3.500).

II. Joint Stock Company and Limited Liability Company

The two types of companies are both limited liability companies and the liability of shareholders for obligations of either a JSC or a LLC is limited to their capital commitment, except for certain obligations of a LLC vis-à-vis the governmental institutions as to be discussed.

For more information and to read the full bulletin please contact us : info@songul.av.tr

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